REG - PetroTal Corp. - Q4 and Full Year 2024 Results
20/03/2025 07:15
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RNS Number : 4626B PetroTal Corp. 20 March 2025
PetroTal Announces Q4 and Full Year 2024 Results
Calgary, AB and Houston, TX - March 20, 2025 - PetroTal Corp. ("PetroTal" or
the "Company") (TSX: TAL, AIM: PTAL and OTCQX: PTALF) is pleased to report its
operating and financial results for the three months and year ended December
31, 2024. All amounts herein are in United States dollars unless stated
otherwise.
Key Highlights
· Average Q4 2024 sales and production of 19,087 and 19,142 barrels of
oil per day ("bopd"), respectively, including volumes from the acquisition of
Block 131, which closed in late November;
· Average FY 2024 sales and production of 17,558 bopd and 17,785 bopd,
respectively, slightly above the guidance range (16,500 to 17,500 bopd), and
an increase of approximately 25% relative to 2023 average production;
· Group production has averaged approximately 23,200 bopd in 2025 YTD;
· Generated EBITDA((1)) of $40.2 million ($22.86/bbl) and $237 million
($36.87/bbl) in Q4 2024 and FY 2024 respectively, near the high end of annual
guidance ($200 to 240 million);
· Development capital expenditures ("capex") totaled $50.6 million in
Q4 2024 and $163 million in FY 2024, near the midpoint of the annual guidance
range ($150-175 million);
· Annual free funds flow((1)) was $74.1 million, prior to returns of
capital to shareholders, representing a yield of approximately 21% relative to
our year-end 2024 market capitalization;
· Available cash increased to $103 million at year-end 2024 (from $91
million the prior year);
· On March 14, PetroTal paid a dividend of $0.015/share, associated
with Q4 2024 results. This was PetroTal's eighth consecutive quarterly
dividend, bringing total return of capital under the Company's dividend
program to $116 million ($0.14/share);
· PetroTal paid total dividends of $0.06/share and repurchased 11.3
million common shares in 2024, representing approximately $65 million of total
capital returned to shareholders (compared to $62 million in 2023).
· Successfully completed seven new oil wells in 2024. During 2024, six
of these oil wells produced just over 2 million bbls of oil and generated
approximately $85 million in net operating income((1)), which amounts to a
100% return of investment as of year-end 2024.
Selected financial and operational information outlined above should be read
in conjunction with the Company's unaudited consolidated financial statements
and management's discussion and analysis ("MD&A") for the three and twelve
months ended December 31, 2024, which are available on SEDAR+ at
www.sedarplus.ca and on the Company's website at www.PetroTal‐Corp.com.
(1) Non-GAAP (defined below) measure that does not have any standardized
meaning prescribed by GAAP and therefore may not be comparable with the
calculation of similar measures presented by other entities. See "Selected
Financial Measures" section.
Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer,
commented:
"PetroTal reported strong financial and operational results in 2024,
increasing our production by an average of 25% over 2023, while returning more
than $65 million to shareholders through dividends and share buybacks. The
Company also successfully managed a period of record low river levels during
the dry season, on our way to exceeding annual production guidance.
2025 is off to an excellent start, with the results of our development
drilling campaign and facility investments supporting year-to-date average
production of more than 23,000 bopd. We are also excited to commence
development on our new asset at the Los Angeles field, along with the greater
Block 131 region, with a new drilling rig expected to arrive around mid-year.
Over the past eight months, PetroTal has been actively hedging its 2025
production volumes and has no long-term debt or significant drilling
commitments. We are committed to our ongoing capital program which prioritizes
a material dividend in tandem with strategic initiatives that include Block
131 development and the erosion control project. I would like to thank
shareholders for their continued support, as well as PetroTal's board of
directors and the rest of the PetroTal team for their continued valuable
contributions to our success"
Selected Financial Highlights
Three Months Ended Twelve Months Ended
Q4-2024 Q3-2024 Q4-2024 Q4-2023
$/bbl $ 000 $/bbl $ 000 $/bbl $ 000 $/bbl $ 000
Average Production (bopd) 19,142 15,203 17,785 14,248
Average sales (bopd) 19,087 14,760 17,558 14,421
Total sales (bbls)((1)) 1,756,030 1,357,961 6,426,106 5,263,485
Average Brent price $73.42 $77.74 $78.98 $81.53
Contracted sales price, gross $73.16 $78.58 $79.15 $80.54
Tariffs, fees and differentials ($21.10) ($20.52) ($20.96) ($20.33)
Realized sales price, net $52.06 $58.06 $58.19 $60.21
Oil revenue((1)) $52.06 $91,421 $58.06 $78,850 $58.19 $373,940 $60.21 $316,911
Royalties((2)) $7.42 $13,022 $5.47 $7,433 $6.22 $39,947 $5.82 $30,648
Operating expense $7.88 $13,843 $8.23 $11,176 $6.90 $44,320 $6.16 $32,446
Direct Transportation:
Diluent $0.14 $248 $0.90 $1,218 $0.77 $4,931 $1.30 $6,857
Barging $1.89 $3,317 $0.68 $927 $0.96 $6,200 $0.66 $3,475
Diesel $0.05 $81 $0.13 $173 $0.08 $520 $0.10 $516
Storage $1.97 $3,452 $0.51 $690 $0.58 $3,697 $0.78 $4,115
Total Transportation $4.05 $7,098 $3.05 $3,008 $2.39 $15,348 $2.84 $14,963
Net Operating Income((3,4)) $32.71 $57,458 $42.14 $57,233 $42.68 $274,325 $45.39 $238,854
Erosion Control $5.45 $9,569 $0.40 $548 $1.57 $10,117 $0.00 $0.00
G&A $4.86 $8,534 $6.75 $9,160 $5.65 $36,291 $5.33 $28,049
EBITDA((3)) $22.41 $39,355 $34.20 $46,406 $35.47 $227,917 $40.05 $210,805
Adjusted EBITDA((3,5)) $22.87 $40,167 $35.69 $48,436 $36.88 $236,972 $40.97 $215,646
Net Income $12.10 $21,242 $4.46 $7,179 $17.34 $111,450 $21.00 $110,505
Basic Shares Outstanding (000) 911,783 913,259 911,783 912,314
Market Capitalization((6)) $355,595 $429,231 $355,595 $556,511
Net Income/Share ($/share) $0.02 $0.01 $0.11 $0.12
Capex $50,589 $43,019 $162,827 $108,454
Free Funds Flow((3) (7)) ($11.02) ($10,422) $4.81 $6,537 $11.56 $74,145 $20.37 $107,192
% of Market Capitalization((6)) (2.9%) 1.2% 20.9% 19.3%
Total Cash((8)) $114,528 $133,072 $114,528 $111,299
Net Surplus (Debt) ((3) (9)) ($1,532) $10,124 ($1,532) $52,307
1. Approximately 89% of Q4 2024 sales were through the Brazilian route vs
89% in Q3 2024.
2. Royalties include the impact of the 2.5% community social trust.
3. Non-GAAP (defined below) measure that does not have any standardized
meaning prescribed by GAAP and therefore may not be comparable with the
calculation of similar measures presented by other entities. See "Selected
Financial Measures" section.
4. Net operating income represents revenues less royalties, operating
expenses, and direct transportation.
5. Adjusted EBITDA is net operating income less general and administrative
("G&A") and plus/minus realized derivative impacts.
6. Market capitalization for Q4 2024, Q3 2024 and Q4 2023 assume share
prices of $0.39, $0.47, and $0.61 respectively on the last trading day of the
quarter.
7. Free funds flow is defined as adjusted EBITDA less capital expenditures.
See "Selected Financial Measures" section.
8. Includes restricted cash balances.
9. Net Surplus (Debt) = Total cash + all trade and net VAT receivables +
short and long term net derivative balances - total current liabilities - long
term debt - non current lease liabilities - net deferred tax - other long term
obligations.
Q4 2024 Financial Variance Summary
Three months ended Twelve months ended
US$/bbl Variance Summary Q4 2024 Q3 2024 Variance Q4 2024 Q4 2023 Variance
Oil Sales (bopd) 19,087 14,760 4,327 17,558 14,421 3,137
Contracted Brent Price $73.42 $77.74 ($4.32) $78.98 $81.53 ($2.55)
Realized Sales Price $52.06 $58.06 ($6.00) $58.19 $60.21 ($2.02)
Royalties $7.42 $5.47 $1.95 $6.22 $5.82 $0.40
Total OPEX and Transportation $11.93 $10.45 $1.48 $9.29 $9.00 $0.29
Net Operating Income((1,2)) $32.71 $42.14 ($9.43) $42.68 $45.39 ($2.71)
G&A $4.86 $6.75 ($1.89) $5.65 $5.33 $0.32
EBITDA $22.41 $34.20 ($11.79) $35.47 $40.05 ($4.58)
Net Income $12.10 $4.46 $7.64 $17.34 $21.00 ($3.66)
Free Funds Flow((1,3)) ($11.02) $4.81 ($15.83) $11.56 $20.37 ($8.81)
· Sales volumes increased by 29% QoQ, due to the conclusion of dry
season in the Amazon basin, which removed constraints on PetroTal's ability to
export crude oil from the Bretana field. FY 2024 sales volumes increased by
22% relative to 2023, due to an active development drilling program and
ongoing expansion of export capacity;
· Brent oil prices declined by $4.32/bbl in Q4, and $2.55/bbl in FY
2024, relative to the comparable periods in 2023. PetroTal's realized sale
price declined by $6.00/bbl in Q4 2024, primarily due to the timing of export
sales during the quarter. However, relative to FY 2023, the Company's realized
sale price declined less than the Brent benchmark;
· Operating and transportation expenses increased by $1.48/bbl in Q4
2024, mainly due to demurrage charges on the Company's barge fleet. However,
on a YTD basis, operating and transportation costs have risen by a marginal
$0.29/bbl;
· Net income rose by $7.64/bbl in Q4 2024, mainly due to an unrealized
derivative gain of $2.7 million, and a gain related to deferred income tax
expense.
1. See "Selected Financial Measures".
2. Net operating income represents revenues less royalties, operating
expenses, and direct transportation.
3. Free funds flow is defined as adjusted EBITDA less capital expenditures.
4. Net Surplus (Debt) = Total cash + all trade and net VAT receivables +
short and long term net derivative balances - total current liabilities - long
term debt - non current lease liabilities - net deferred tax - other long term
obligations.
( )
Additional financial and operational updates during and subsequent to the
quarter ending December 31, 2024:
Production & Drilling Update
PetroTal's 2025 year-to-date production has averaged approximately 23,200
bopd, including 22,600 bopd from the Bretana field and 600 bopd from the Los
Angeles field. With river levels comfortably above the historical average
during the ongoing rainy season, PetroTal is currently exporting from the
Bretana field near the capacity of its barge fleet. Production also remains
constrained by facility capacity, as the Company awaits the installation of
CPF4, which will increase oil handling capacity to 32,000 bopd by mid-year.
The Company continues to observe strong production response from recently
drilled wells; the 22H well was brought onstream in mid-January and averaged
4,500 bopd over its first 30 days onstream, including a maximum daily rate of
7,025 bopd. Well 23H was brought onstream for production testing in the last
week of February 2025, flowing naturally at an average of 3,500 bopd over its
first ten days onstream. Flush production from wells 22H and 23H is expected
to be sufficient to support production levels throughout H1 2025, in advance
of the annual dry season which typically sets in by August.
Erosion Control Project
PetroTal has demobilized its drilling rig at Bretana and is preparing to ramp
up activity on the erosion control project in Q2 2025. Transportation of the
preassembled steel segments from the project's staging point in Pucallpa is
expected to take place in May, when the jackup is also expected to arrive on
site. The Company should be in a position to provide additional updates on the
project with Q1 2025 results in mid-May.
As previously disclosed, PetroTal recorded a $9.6 million expense for the
erosion control project in Q4 2024, primarily associated with the purchase of
steel components. The Company continues to budget $35-40 million for the
erosion control project in 2025, approximately 75% of which will be expensed
through the income statement.
Cash and Liquidity Update
PetroTal ended 2024 with a total cash position of $114.5 million, of which
$102.8 million was unrestricted. This compares to total cash of $133 million
at the end of Q3 2024, and $111 million at the same time last year. Net
Surplus, a non-IFRS measure which PetroTal uses to describe its liquidity
position net of working capital and various non-current liabilities, declined
to a deficit of $1.5 million at the end of Q4 2024. This compares to a surplus
of $10.1 million at the end of Q3 2024, and $52 million at the end of 2023.
The main source of variance in net surplus relative to the prior quarter is
the lease liability associated with PetroTal's acquisition of a drilling rig
in Q4 2024. Relative to year-end 2023, PetroTal has also recorded a large
increase in tax liabilities as the Company consumed net operating losses over
the prior three years.
PetroTal entered into additional hedge agreements during Q4 2024, and
subsequently in January 2025. The Company now has hedges on an average of
260,000 barrels per month over the next twelve months, which represents
approximately 40% of forecast production volumes. The terms of the hedge
agreements entered into during Q4 2024 and January 2025 are essentially the
same as those reported with Q3 2024 results in November. PetroTal's hedges
consist of costless collars with a Brent floor price of $65.00/bbl and a
ceiling of $82.50/bbl, with a cap of $102.50/bbl.
Shareholder Returns Update
As previously announced on February 20, 2025, PetroTal declared a quarterly
dividend of $0.015 per share, associated with Q4 2024 results. This dividend
was paid on March 14 to shareholders of record as of February 28, bringing
cumulative payout under the Company's ongoing dividend program to $116
million. PetroTal's 2025 liquidity strategy prioritizes dividend
sustainability, balanced with Block 131 development and erosion control
working capital requirements. As a result, the volume of share buybacks has
decreased compared to previous quarters. The Company will continue to
monitor buyback levels and will operate in the quarterly approved bandwidths
announced in May 2024.
2025 Budget Guidance
As previously announced on January 16, 2025, PetroTal has guided to annual
average production of 21,000 to 23,000 bopd in 2025, an increase of
approximately 24% relatively to 2024. At an annual average Brent oil price of
$75.00/bbl, this production is expected to drive annual EBITDA of $240 to 250
million, supported by capital investments of $140 million. As of March 20,
2025 PetroTal is pleased to report no material changes to its forecast.
Year-end 2024 Reserves
On February 19, 2025, PetroTal announced its updated reserves evaluation for
the year ending December 31, 2024. The Company reported growth in all major
reserves categories, with its 2P after tax reserves value per share increasing
to $1.89/share. The after tax net present value of PetroTal's reserves,
discounted at 10% ("NPV10"), increased to $1.7 billion, on associated 2P
reserves of 114 million bbls. The Company successfully replaced 293% and 208%
of 1P and 2P reserves, respectively, with an associated 2P reserve life index
of 13 years. For the full text of this announcement, please refer to
PetroTal's press release dated February 20, 2025, filed on SEDAR+
(www.sedarplus.ca) and posted on PetroTal's website (www.petrotalcorp.com). In
addition to the summary information disclosed in this press release, more
detailed information will be included in the annual information form for the
year ended December 31, 2024, to be filed on SEDAR+ (www.sedarplus.ca) and
posted on PetroTal's website (www.petrotalcorp.com) by March 28, 2025.
Corporate Presentation Update
The Company has updated its Corporate Presentation, which is available for
download or viewing at www.petrotalcorp.com (http://www.petrotalcorp.com) .
Q4 2024 Webcast on March 20, 2025
PetroTal's management team will host a webcast to discuss Q4 2024 results on
March 20, 2025 at 9am CT (Houston) and 2pm GMT (London). Please see the link
below to register.
https://stream.brrmedia.co.uk/PTAL_Q4_2024
(https://stream.brrmedia.co.uk/broadcast/67c969e0a65c50207341151e)
ABOUT PETROTAL
PetroTal is a publicly traded, tri‐quoted (TSX: TAL, AIM: PTAL and OTCQX:
PTALF) oil and gas development and production Company domiciled in Calgary,
Alberta, focused on the development of oil assets in Peru. PetroTal's
flagship asset is its 100% working interest in the Bretaña Norte oil field in
Peru's Block 95, where oil production was initiated in June 2018. In early
2022, PetroTal became the largest crude oil producer in Peru. The Company's
management team has significant experience in developing and exploring for oil
in Peru and is led by a Board of Directors that is focused on safely and cost
effectively developing the Bretaña oil field. It is actively building new
initiatives to champion community sensitive energy production, benefiting all
stakeholders.
For further information, please see the Company's website at
www.petrotal-corp.com (http://www.petrotal-corp.com) , the Company's filed
documents at www.sedarplus.ca (https://www.sedarplus.ca/landingpage/) , or
below:
Camilo McAllister
Executive Vice President and Chief Financial Officer
Cmcallister@PetroTal-Corp.com
T: (713) 253-4997
Manolo Zuniga
President and Chief Executive Officer
Mzuniga@PetroTal-Corp.com
T: (713) 609-9101
PetroTal Investor Relations
InvestorRelations@PetroTal-Corp.com
Celicourt Communications
Mark Antelme / Jimmy Lea
petrotal@celicourt.uk
T : +44 (0) 20 7770 6424
Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / James Spinney / Robert Collins
T: +44 (0) 207 409 3494
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart / Simon Mensley / Ashton Clanfield
T: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton / David McKeown / Georgia Langoulant
T: +44 (0) 20 7418 8900
READER ADVISORIES
FORWARD-LOOKING STATEMENTS: This press release contains certain statements
that may be deemed to be forward-looking statements. Such statements relate to
possible future events, including, but not limited to: oil production levels
and production capacity, including wells 22H and 23H; PetroTal's 2025
development program for drilling, completions and other activities, including
Block 131 and CPF-4 at Bretana; plans and expectations with respect to the
erosion control project; and PetroTal's expectations with respect to dividends
and share buybacks. All statements other than statements of historical fact
may be forward-looking statements. Forward-looking statements are often, but
not always, identified by the use of words such as "anticipate", "believe",
"expect", "plan", "estimate", "potential", "will", "should", "continue",
"may", "objective", "intend" and similar expressions. The forward-looking
statements provided in this press release are based on management's current
belief, based on currently available information, as to the outcome and timing
of future events. The forward-looking statements are based on certain key
expectations and assumptions made by the Company, including, but not limited
to, expectations and assumptions concerning the ability of existing
infrastructure to deliver production and the anticipated capital expenditures
associated therewith, the ability to obtain and maintain necessary permits and
licenses, the ability of government groups to effectively achieve objectives
in respect of reducing social conflict and collaborating towards continued
investment in the energy sector, reservoir characteristics, recovery factor,
exploration upside, prevailing commodity prices and the actual prices received
for PetroTal's products, including pursuant to hedging arrangements, the
availability and performance of drilling rigs, facilities, pipelines, other
oilfield services and skilled labour, royalty regimes and exchange rates, the
impact of inflation on costs, the application of regulatory and licensing
requirements, the accuracy of PetroTal's geological interpretation of its
drilling and land opportunities, current legislation, receipt of required
regulatory approval, the success of future drilling and development
activities, the performance of new wells, future river water levels, the
Company's growth strategy, general economic conditions and availability of
required equipment and services. PetroTal cautions that forward-looking
statements relating to PetroTal are subject to all of the risks, uncertainties
and other factors, which may cause the actual results, performance, capital
expenditures or achievements of the Company to differ materially from
anticipated future results, performance, capital expenditures or achievement
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially from those set forth in the
forward-looking statements include, but are not limited to, risks associated
with the oil and gas industry in general (e.g., operational risks in
development, exploration and production; delays or changes in plans with
respect to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks), business performance, legal and legislative developments
including changes in tax laws and legislation affecting the oil and gas
industry and uncertainties resulting from potential delays or changes in plans
with respect to exploration or development projects or capital expenditures,
credit ratings and risks, fluctuations in interest rates and currency
values, changes in the financial landscape both domestically and abroad,
including volatility in the stock market and financial system, wars (including
Russia's war in Ukraine and the Israeli-Hamas conflict), regulatory
developments, commodity price volatility, price differentials and the actual
prices received for products, exchange rate fluctuations, legal, political and
economic instability in Peru, access to transportation routes and markets for
the Company's production, changes in legislation affecting the oil and gas
industry, changes in the financial landscape both domestically and abroad
(including volatility in the stock market and financial system) and the
occurrence of weather-related and other natural catastrophes. Readers are
cautioned that the foregoing list of factors is not exhaustive. Please refer
to the annual information form for the year ended December 31, 2023 and the
management's discussion and analysis for the three months ended March 31, 2024
for additional risk factors relating to PetroTal, which can be accessed either
on PetroTal's website at www.petrotal-corp.com (http://www.petrotal-corp.com/)
or under the Company's profile on www.sedarplus.ca
(https://www.sedarplus.ca/landingpage/) . The forward-looking statements
contained in this press release are made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information, future
events or otherwise, unless so required by applicable securities laws.
OIL REFERENCES: All references to "oil" or "crude oil" production, revenue or
sales in this press release mean "heavy crude oil" as defined in National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI
51-101").
SHORT TERM RESULTS: References in this press release to peak rates, initial
production rates, current production rates, 30-day production rates and other
short-term production rates are useful in confirming the presence of
hydrocarbons, however such rates are not determinative of the rates at which
such wells will commence production and decline thereafter and are not
indicative of long-term performance or of ultimate recovery. While
encouraging, readers are cautioned not to place reliance on such rates in
calculating the aggregate production of PetroTal. The Company cautions that
such results should be considered to be preliminary.
FOFI DISCLOSURE: This press release contains future-oriented financial
information and financial outlook information (collectively, "FOFI") about
PetroTal's prospective results of operations and production results, 2024
drilling program and budget, well investment payback, cash position, liquidity
and components thereof, all of which are subject to the same assumptions, risk
factors, limitations and qualifications as set forth in the above paragraphs.
FOFI contained in this press release was approved by management as of the date
of this press release and was included for the purpose of providing further
information about PetroTal's anticipated future business operations. PetroTal
and its management believe that FOFI has been prepared on a reasonable basis,
reflecting management's best estimates and judgments, and represent, to the
best of management's knowledge and opinion, the Company's expected course of
action. However, because this information is highly subjective, it should not
be relied on as necessarily indicative of future results. PetroTal disclaims
any intention or obligation to update or revise any FOFI contained in this
press release, whether as a result of new information, future events or
otherwise, unless required pursuant to applicable law. Readers are cautioned
that the FOFI contained in this press release should not be used for purposes
other than for which it is disclosed herein. All FOFI contained in this press
release complies with the requirements of Canadian securities legislation,
including NI 51-101. Changes in forecast commodity prices, differences in the
timing of capital expenditures, and variances in average production estimates
can have a significant impact on the key performance measures included in
PetroTal's guidance. The Company's actual results may differ materially from
these estimates.
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